Finance broker body calls on banks to pass on full rate cut

The national peak body representing finance brokers has called on the major banks to not play scrooge and to pass on the full interest rate cut, following the Reserve Bank’s historic move to lower official rates to 1.5 per cent – their lowest ever.

Peter White from the Finance Brokers Association of Australia says it was bitterly disappointing that the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), and ANZ failed to fully pass on the Reserve Bank’s cut of 25 basis points.

“Banks must protect shareholders but they also must look after their customers. It was disheartening to find the CBA and NAB not passing on the full reduction which most banks passed on during the last official rate reduction in May.”

Mr White also questioned the CBA’s decision to start the new rate from August 19 – three weeks after the Reserve Bank’s drop.

“When rates rise the lenders lift their variable rates immediately! Again it is the customer who is being treated poorly.”

The finance industry veteran is also urging customers who already have loans locked in, to think carefully about whether to refinance and perhaps move to a variable loan.

“My advice would be to have a mixture of both fixed and variable, but be aware that rates will inevitably climb, perhaps sooner rather than later.”